NACHA Bank Account Validation Rule & Related Fees

Nucleus Giving’s entire platform is dedicated to ensuring churches receive 100% of every single intended donation, where donors cover every typical transaction fee associated with each gift. We also strive to cover any additional potential fees - security fees, PCI compliance fees, etc. - that could come up unexpectedly. But there is one such fee that was added recently which to date, we don’t have any access to cover for you. 

So let’s talk about it.

Note: This rule is industry-wide, and all online giving platforms are bound to comply with it.

In this guide, we'll cover the following topics. Click on any one to jump ahead.

Who Is NACHA?

NACHA (the National Automated Clearing House Association) is the governing body that oversees the ACH network that processes payments from US bank accounts. If processors (or organizations using online processing accounts) do not comply with NACHA's operating rules, it could result in penalties and, in some cases, account termination.

While Nucleus Giving provides you with the platform to take in and manage digital donations, we are not the entity that actually processes these transactions. As such, we must comply with our card processor and respect any rules/regulations put in place by their authority: NACHA.

A Quick Recap Of The ACH Payout Schedule

While you can take a look here at a more in-depth explanation of how ACH donations are paid out (and the timeline you can expect ACH donations to be paid out), it’s important to highlight how they are paid out to help explain the bank account validation rule.

As a reminder, any ACH transaction has a flat rate of 25 cents that Givers cover 100% of the time to cover for processing the transaction.

Now, unlike credit card donations, where the transaction fee covered by the donor is given directly to our card processor, the transaction fees covered by the donor for ACH donations are deposited alongside each ACH donation. Then once a month (usually around the 5th-7th), all the ACH transaction fees for the prior month are extracted from your church’s bank account.

To see a visual of how this works, click here.

The important thing to understand is that all the typical ACH transaction fees that are covered by the donor from the previous month, are then withdrawn (in a single transaction) from your church’s bank account the following month.

What Is The Bank Account Validation Rule?

NACHA (and the processing partners of Nucleus) began enforcing a new WEB Debit Account Validation Rule in March 2022. This requires organizations to validate any consumer bank accounts that they haven’t successfully debited before.

As you can read directly on their website, this is to help screen bank accounts being used to transfer funds (before actually transferring those funds), in order to reduce/prevent fraudulent activity, as well as things like bad accounts and bounces.

Difference Between Donor-Covered ACH Fees & Validation Fees

Processors (including the one that provides processing for Nucleus) have introduced a 25-cent NACHA fee for all transactions where the Giver's bank account requires validation via NACHA's system to maintain compliance.

While the donor can - and always will! - cover the typical ACH transaction fee for the actual processing of each donation, unfortunately the NACHA validation fee currently cannot be covered by Givers or by Nucleus.

The good news is, however, not all bank accounts will be charged this validation fee (more on that below). Any fees incurred from validation attempts will be calculated and extracted in the same withdrawal as the typical ACH transaction fees already covered by Givers.

So to expand and clarify: once a month (usually around the 5th-7th), you will see a withdrawal by our card processor. That withdrawal will include:

  • All the typical ACH transaction fees that Givers covered from the previous month, and were previously deposited alongside each ACH donation. (A net zero.)
  • Any bank account validation fees that were incurred in the previous month. (A potential net negative.)

This means that, for all bank account gifts, there will be the typical 25 cent transaction fee (covered by the donor), plus in some cases, a one-time 25 cent account validation fee. This means that, while all regular 25 cent ACH transaction fees will always be covered by your donors, you may see some additional 25 cent fees extracted (alongside the regular ACH fees covered) from your church’s bank account that cannot currently be covered by your Givers.

Not Just Nucleus Giving

As explained at the very beginning of this article, it’s important to reiterate that this is industry-wide, and all online giving platforms that take in ACH donations are required to comply with this standard. This means the bank account validation fee will apply to any and all ACH transactions where the initiating bank account has yet to be validated by NACHA, no matter if the transaction takes place via Nucleus Giving or any other online giving platform out there.

That being said, even with the bank account validation fees, Nucleus Giving still has the lowest effective rate for fees in the entire online church giving market and continues to save churches millions of dollars combined in fees that would have otherwise been lost forever on any other giving (or church payments) platform.

Though we have to comply with all rules from the financial institutions that make online transactions possible, we will continue our best to keep churches and Givers sheltered as much as humanly possible from high fees that are all too common in this space.

Tips To Avoid Bank Account Validation Fees

Before continuing, let’s take a moment to celebrate that if there are tips to avoid the fee being incurred, then that means it’s possible to see ZERO bank account validation fees be removed from your church’s bank account 🙌

In fact, bank account validation fees are more rare than you might think. In our experience, few ACH donations go through the validation process, meaning the majority of ACH gifts never see the validation fee tacked on. (This is especially true of churches who follow our tips below 😎)

While we can’t guarantee that you won’t see bank account validation fees from NACHA, there are ways to help mitigate how many validation fees will be extracted from your church’s bank account each month.

1. Pre-Validated Bank Accounts (Prior to March 2022)

For churches switching from RebelGive to Nucleus Giving, who also recently changed how your ACH fee structure operates, we've already done some work for you to pre-validate any previously used bank accounts (with at least one successful donation) that your congregation has saved to their personal giving accounts. This means that for all recurring gifts people had set up with their bank accounts, or any new gifts people create using an existing, valid bank account they had previously saved, the validation fee will not apply. This translates into immediate, huge savings as existing accounts that were already valid were not charged unnecessarily.

2. Bank Accounts Added Via Plaid

Plaid, the service that allows us to connect bank accounts using online banking login credentials, automatically validates all bank accounts (in compliance with NACHA's new rule) when a new account is linked. This means that anyone who adds their bank account using Plaid always avoids the bank account validation fee, because we cover that as part of the costs we pay to Plaid on your behalf to use their service. Because of this, we strongly encourage you to recommend this as the best option to your congregation when adding a new bank account instead of manual entry.

👉 Not only do you avoid having to pay unnecessary bank account validation fees, a bonus with this method is that it also eliminates any mistyping of bank account numbers!

If anyone is concerned with using Plaid, below are a few links to how Plaid works and understanding the security of their system:

3. Saving Bank Accounts To Your Nucleus Profile

Whenever someone gives a donation through the GivingFlow (or a transaction via the Payment Step in a custom Flow), they have an opportunity to create a personal Nucleus Account as well as save their payment method. As long as someone is logged into the GivingFlow and uses a previously validated (and saved) bank account payment method, there will not be an additional validation fee associated with new transactions they create with that payment method.

So whether someone connects their bank account via Plaid or enters their bank account information manually the first time they give, we also recommend educating your congregation to create personal Nucleus Accounts and to save their payment method, so that any subsequent gifts they give (using that saved payment method when logged in) there will only be the typical 25 cent processing fee associated with the transaction that is 100% covered by the Giver every time. If they don't save the method to a Nucleus account (and login and choose that method when they give again), the bank account validation fee may be charged again, depending on how they enter it.

Where To See If Any Validation Fees Have Been Incurred

To help bring transparency to the bank account validation fee, there are a few different areas where you can see if bank account validation fees have been incurred.

1. The NACHA Fee Column

While managing/viewing any transactions table, you can toggle on the NACHA Fee column to quickly see if an individual donation needed to be validated by NACHA, thus incurring the 25 cent validation fee.

2. Your Transfers Panel

When you gather and then expand the stats in your Transfers Panel here, you can see both the typical ACH Fees and the NACHA fees for all ACH donations over the last 30 days.

Any fees listed by the ACH Fees are 100% covered by your Givers. These are the typical transaction fees that Givers cover to pay our card processor to process the transaction.

Any fees listed by the NACHA Fees are not covered by your Givers. These are the possible fees you could see incurred depending on how many bank accounts needed to be validated over the last 30 days.

3. An Individual Transfer

Just like you can see stats for all your Transfers, while viewing a specific Transfer, you can see if any NACHA fees were incurred for any particular Transfer.

4. An Individual Transaction

Getting even more granular, you can view the details of a specific transaction and see if any particular transaction was linked with a bank account that needed validation.

What Next?

At the beginning of this article, we briefly touched on the ACH gift payout schedule. If you missed it, why don’t you check out that guide now?

Otherwise, here are some other articles you might be interested in helping you reconcile your bank statements:

Did this answer your question? Thanks for the feedback There was a problem submitting your feedback. Please try again later.